- Standard residential home insurance excludes commercial paying-guest activity, so taking even one paying guest can void a home policy and leave a claim unpaid.
- Employers' liability insurance is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969 if your B&B employs any staff, with fines of up to 2,500 GBP per day for non-compliance.
- Public liability is not legally compulsory but is treated as essential, with B&B policies commonly offering cover from 1 million to 5 million GBP for guest injury or property damage claims.
- The Airbnb Host Guarantee (now AirCover for Hosts) is not a regulated insurance product and carries exclusions, so the FCA and ABI both point hosts towards proper commercial cover.
- As of 2026, a furnished holiday letting or B&B may need planning consent for change of use and written consent from a mortgage lender before paying guests are accepted.
Running a B&B is a business, not a private household. Standard home insurance will not pay out for paying-guest claims, so you need a B&B or guest house policy covering buildings, contents, public liability, employers' liability if you have staff, loss of income and guest property.
Last reviewed: June 2026
Why standard home insurance does not cover a B&B
The single most important fact for any UK bed and breakfast owner is this: a standard residential home insurance policy does not cover commercial activity. The moment you accept money from a guest to stay overnight, your property is being used for a business purpose. Most home insurers exclude paying guests entirely, or restrict cover to a small number of nights per year without any commercial trading. If a guest trips on your stairs, a kitchen fire spreads, or a visitor's car is damaged on your driveway, a home insurer is entitled to refuse the claim and, in some cases, cancel the policy outright.
This matters even at the smallest scale. Letting one spare room through an online platform is enough to take you outside the terms of a typical household policy. Insurers treat the increased footfall, the handling of food, and the presence of strangers in the property as materially different risks from those of an ordinary family home. The duty of fair presentation under the Insurance Act 2015 also requires you to disclose how the property is actually used. If you do not tell your insurer you are running a B&B, any later claim, even one unrelated to the guests, can be challenged.
A dedicated B&B or guest house policy is built around these realities. It combines the protection a homeowner expects with the commercial liabilities that come from inviting the public to stay and eat under your roof.
What a B&B insurance policy needs to cover
B&B cover is usually arranged as a packaged commercial policy. The components below are the ones most owners should expect to see, and the ones underwriters will ask about.
Buildings insurance
Buildings cover protects the physical structure: walls, roof, floors, fitted kitchens and bathrooms, and permanent fixtures. For a B&B, the sum insured should reflect the full rebuild cost of a property used commercially, which can differ from a domestic rebuild figure because of fire safety requirements, commercial kitchen fit-out and higher occupancy. If you have a mortgage, your lender will almost always require buildings cover to be in place and adequate.
Contents and stock
Contents cover applies to everything that is not part of the structure: beds, bedding, furniture, white goods, crockery, electrical items and decor. B&B contents wear faster than domestic contents because of constant guest use, so it is worth insuring on a new-for-old basis where available. Food stock and supplies for breakfasts can usually be added.
Public liability
Public liability (PL) covers your legal liability if a guest or other member of the public is injured, or their property is damaged, as a result of your business. A slip in a wet bathroom, a falling shelf, or food that causes illness can all lead to a claim. PL is not legally compulsory, but no serious B&B should trade without it. Cover levels of 1 million, 2 million or 5 million GBP are standard.
Employers' liability
If you employ anyone, including part-time cleaners, breakfast cooks or seasonal help, employers' liability (EL) insurance is a legal requirement under the Employers' Liability (Compulsory Insurance) Act 1969. You must hold at least 5 million GBP of cover (most policies provide 10 million GBP) and display or make available the certificate. The Health and Safety Executive can fine uninsured employers up to 2,500 GBP for each day they trade without valid EL cover.
Loss of income (business interruption)
If a fire, flood or escape of water forces you to close rooms, loss of income cover replaces the revenue you would otherwise have earned and helps with ongoing costs while repairs are carried out. For a seasonal B&B, the indemnity period and the sum insured should be set carefully so that a peak-season closure is properly covered.
Guests' property
Under the Hotel Proprietors Act 1956, B&B owners can carry a legal liability for the loss of or damage to guests' belongings during their stay. Many B&B policies include a guests' property section to meet this exposure, often with per-guest and per-incident limits. Displaying the statutory notice can also help limit liability in certain circumstances.
Standard home insurance versus B&B insurance
The table below sets out the practical difference between a residential home policy and a B&B-specific commercial policy. The gaps in the home column are exactly where uninsured losses occur.
| Cover element | Standard home insurance | B&B-specific insurance |
|---|---|---|
| Buildings (private use) | Covered | Covered at commercial rebuild value |
| Buildings damage caused by paying guests | Typically excluded | Covered |
| Contents used by guests | Excluded for commercial use | Covered, often new-for-old |
| Public liability to guests | Not provided | Covered, 1m to 5m GBP |
| Employers' liability | Not provided | Included where staff employed |
| Loss of income | Limited alternative accommodation only | Business interruption cover |
| Guests' belongings | Not provided | Optional guests' property section |
| Food poisoning liability | Not provided | Covered under product/PL section |
Planning permission and change of use
Insurance is only one part of running a compliant B&B. Where guest activity becomes a material part of how a property is used, the local planning authority may treat it as a change of use that requires planning permission. There is no single national threshold, but factors such as the number of letting rooms, the proportion of the building given over to guests, extra parking, signage and traffic can all tip a private home into a commercial use class. If you are unsure, the safest route is to ask your council's planning department before you start trading. Operating without required consent can lead to enforcement action and complicate any future insurance claim or sale of the property.
You may also need to register with environmental health for food hygiene, comply with fire safety regulations under the Regulatory Reform (Fire Safety) Order 2005, and meet gas and electrical safety obligations. Insurers will often ask whether these are in place, and a serious gap can affect cover.
Mortgage lender considerations
If your B&B is mortgaged, you almost certainly need your lender's consent before accepting paying guests. A standard residential mortgage is granted on the basis that the property is your private home. Running a business from it, especially one that brings members of the public to stay overnight, can breach the mortgage terms. Some lenders permit limited B&B activity with written consent; others require you to move to a commercial or semi-commercial mortgage product. Trading without telling your lender risks a demand for repayment and can sit awkwardly alongside an insurance claim, because insurers will expect the property's use to be properly authorised.
Speak to your lender early and get any permission in writing. If you are buying a property specifically to run as a B&B, a commercial mortgage is usually the correct route from the outset.
Airbnb host cover and its limits
Many B&B and short-let hosts assume that platform protection replaces insurance. It does not. AirCover for Hosts, formerly the Host Guarantee, is a protection programme offered by the platform, not a regulated insurance contract sold by an FCA-authorised insurer. It carries its own conditions, exclusions and claims process, and it is designed to sit alongside, not instead of, your own cover. It typically focuses on damage caused by guests and certain liability scenarios, but it may not respond to buildings damage, loss of income, your own contents wearing out, employers' liability, or claims that fall outside the platform's terms.
Crucially, relying on platform protection does not satisfy your legal duty to hold employers' liability cover if you have staff, and it does not replace the buildings cover your mortgage lender requires. Treat any platform guarantee as a possible top-up, and arrange proper B&B insurance as your primary protection.
Frequently Asked Questions
Does home insurance cover a B&B?
No. A standard residential home insurance policy excludes commercial paying-guest activity. Accepting money from guests, even for a single room, can take you outside the policy terms and lead to a refused claim or a cancelled policy. You need a dedicated B&B or guest house policy instead.
Does a B&B need public liability insurance?
Public liability is not a legal requirement, but it is treated as essential. It covers compensation and legal costs if a guest is injured or their property is damaged because of your business, including slips, trips and food-related illness. Cover of 1 million to 5 million GBP is standard for a B&B.
Do I need to tell my mortgage lender about a B&B?
Yes. A standard residential mortgage assumes the property is your private home. Running a B&B usually requires the lender's written consent and may require switching to a commercial mortgage. Trading without telling your lender can breach the mortgage terms and complicate insurance claims, so seek permission before accepting guests.
Does B&B insurance cover guest belongings?
Many B&B policies include an optional guests' property section. Under the Hotel Proprietors Act 1956, owners can be liable for loss of or damage to guests' belongings during their stay, usually subject to statutory limits. Check whether your policy includes this cover and at what per-guest and per-incident limits.
Is Airbnb host cover enough for a B&B?
No. AirCover for Hosts is a platform protection programme, not a regulated insurance policy, and it carries exclusions. It does not satisfy the legal requirement for employers' liability if you have staff, nor the buildings cover your mortgage lender requires. Arrange proper B&B insurance as your primary protection and treat platform cover as a possible top-up.
